Stephen Donnelly (Wicklow, Independent)

I welcome the creation of a senior Cabinet post for public sector reform and sincerely wish the Minister, Deputy Howlin, the very best in his efforts. Along with the Minister for Finance the challenges and opportunities he faces are some of the most important facing our society. I agree with Deputy Calleary that arguably they are as important as sorting out the economic mess in which we find ourselves.

I support the Bill, but would like to voice some concerns, particularly with the Ministry that has been established. Potentially what makes the Minister's portfolio so strong could also be its greatest challenge, which is the specific linking of expenditure with public sector reform. If the Croke Park agreement is an example of what we mean by public sector reform, the new Ministry makes considerable sense because it allows the Minister and his team to discuss changes to working practices in tandem with changes to pay. My understanding of the mindset used in reaching the Croke Park agreement is as follows. The union leaders said: "We, the unions, are aware of many inefficiencies in working practices across the public sector. You, the Government, have cut the salaries of our members, so let's negotiate. If you give us back the money you have taken away we will change the working practices we all know to be deeply inefficient." I can understand how this approach and mindset came about. We have had a legacy of supposed social partnership and we have extraordinarily strong public sector unions. I also understand there is a pressing need to cut public sector expenditure. Essentially, we very quickly need to do more with less or at the very least try to maintain public services with less, which is extremely challenging.

However, I suggest that approach and mindset leads to public service reform in the most limited sense possible. It is a negotiation of a change in outdated restrictive working practices for more money. While that approach may save money, which is badly needed, it will not transform our public services. Real public sector transformation is not a negotiation for pay versus working practices. It is a process of real engagement with public sector workers to set a new vision for the Civil Service and for education, health or whatever the service area is in order to identify with public sector workers the barriers to achieving that vision and the opportunities that can be used to achieve it, and supporting public sector workers in overcoming the barriers and in using the opportunities ahead of them.

The evidence from around the world is that genuine transformations as opposed to changes in working practices fail most of the time. The evidence is that 70% of transformations fail. The failure rate is even higher in the public sector where it is more complex and in systems as difficult as the ones the Minister will need to address. The main reason they fail is that they overlook the human element. Of the 70% of transformations that fail, in 70% of the cases the reason is that the human element is overlooked. In other words, in both the private and public sector, the Croke Park mindset is used, which seeks changes in practices with changes in remuneration accordingly. However, in both the private and public sectors they do not engage the workers in asking them what they want. For example, we should be asking if we want one of the best education systems in the world.

Contrary to the mindset of the Croke Park deal and much of the national debate on public sector reform that I have heard so far, pay actually plays a very small part in real transformation. Surveys from all over the world consistently show that workers rate pay as the fifth or sixth most important aspect of motivation and them doing a good job. As an aside, it is worth noting that the only sector where that does not apply and where it is consistently rated as the single most important motivator is in investment banking. Ahead of pay, workers all over the world consistently say that the things that motivate them are recognition for the work and being given the space, training and capability to do the best job they can possibly do. If we want more from public sector reform than increased efficiency, and if we genuinely want to transform public services and have one of the best health care and education systems and one of the best policy-making bodies in the world, we must adopt a much more sophisticated and inclusive approach than that envisaged under the Croke Park agreement.

We all know our education system is in very serious crisis. The latest PISA report shows Ireland has experienced the biggest fall in educational standards in the developed world in a decade. Some commentators and union representatives have, on television, blamed this on the inclusion of students with special educational needs or students whose native language is not English. The figures show that this is nonsense. They show we have had a genuinely serious fall in educational standards.

Taking a longer-term view, we must regard the fall in our educational standards as being as important as our debt. If we do not have an education system that is among the top five in the world within the next five to ten years, we will be consigned to being a second-rate country for decades. Most would agree with that. In that context, radical reform of the education system is required. Negotiating one extra hour of work per week for teachers under the Croke Park agreement for changes in pay, pensions or working conditions will not achieve that kind of reform; it will not really do anything.

New Zealand has one of the top three education systems in the world. I am not suggesting we should adopt its model but we should examine it to give us a sense of what radical reform can look like. New Zealand's Government announced one morning that its Department of Education was to be closed down and that it was setting up a Ministry for education. I understand that, of the top 35 staff in the new Ministry, only one had been transferred from the old Department. I am not suggesting we should shut down our Department of Education and Skills but such steps towards radical reform must be considered if we are genuinely to have one of the top five education systems in the world.

My concern with having expenditure and reform on two sides of the same coin is that it may make it very difficult to move beyond the Croke Park mindset, which I accept is very useful, towards genuine reform. With regard to education, the Croke Park deal involves union leaders, quango appointees and some politicians in rooms around Leinster House negotiating changes in working practices for changes in pay. The only people who will turn our education system into one of the top systems in the world are the teachers and principals, yet they comprise the only group that is not engaged in the reform discussions. This worries me but I have no doubt the Minister has thought of this and has all manner of clever ideas to engage with the teachers and principals.

We have a peculiar approach to policy experimentation in Ireland. While I acknowledge Ireland is small, negotiations such as the Croke Park negotiations essentially create changes across the board, for every school in the country. In other countries, this is not the case. In the United States, for example, the authorities experiment and engage with school boards, principals and groups of schools in a selected area. The objective is to let them come up with good ideas. Afterwards different policy experiments are tried out nationally, or in New York State, for example. I refer to mentoring programmes and other such initiatives. An approach such as this might be very useful in Ireland and would allow us to experiment and determine some of the very best policy ideas.

I have worked abroad on public sector reform. I have consistently noted two characteristics of the public servants with whom I have worked. The first is that pretty much every one of them has a genuine, deep-seated desire to serve the public. The second is that many of them are very deeply frustrated that they are not able to serve and to realise the passion, energy and idealism that attracted them to the public sector in the first instance. One hears from them repeatedly that they are not rewarded or recognised for doing good work and that they will not take any risks because if they get something wrong they will be crucified therefor. I hear the phrase "silo mentality" used a lot. It implies that teams do not share information with one another across the civil service or within various public service organisations. Although I have never worked on public sector transformation in Ireland, I have heard the same points being made here. Anecdotally, I hear the same points being made by colleagues of mine in the Irish public service and by those who engage with it.

The great opportunity is to recognise that there is considerable desire and capability within the public service to do the best job possible, as Deputies have stated today and yesterday. Most teachers want to work in and be part of the best school in Ireland. All teachers would love Ireland to have the best education system in the world. This is being prevented partly because unions are sitting between the employer, the State, and the teachers or principals. I would love to see something happen in this regard that would unleash the full potential of public sector workers.

It is in this context that I hope the Minister, in his new portfolio, will be able to move the conversation away from that which regards public expenditure and reform as two sides of the same coin. If that is the conversation, we will save money but will never create genuinely world-class public institutions. I hope that what I propose can happen and that we can move the conversation on quickly. I wish the Minister luck and would be delighted to discuss with him what I have seen work around the world, if that would be useful.

See this speech in context